Forward curve showing little concern regarding availability of future supplies.
You can’t swing a cat without hitting a barrel of oil in the U.S… Not that Wall Street would tell you!
We will have to wait until the end of this month for the latest monthly update from the DOE, but suffice it to say, the preliminary (weekly) numbers show inventories of crude oil and petroleum products at the highest levels in over a generation. For instance, in between May and June a 0.3% year-on-year deficit in commercial crude oil stocks morphed into a 3.9% (p) surplus in June. Furthermore, supplies in July will likely finish the month over 355 MMbbls… the first such occurrence since 1990.
Meantime, with only a few weeks remaining in the summer driving season stocks of gasoline are more than comfortable. Stocks were virtually unchanged last week when we normally see a drawdown in excess of 2.0 MMbbls for this report. As such, stocks will finish the month of July above 220 MMbbls for the first time since 1989 and we will head towards the end of the season — the Labor Day holiday on September 06th — with around a 5% cushion to a year ago.